By: Baylee Carter
Today, people are watching Netflix more than ever, and Netflix is churning out seemingly endless content. With more content comes the increased possibility that Netflix is engaging in copyright infringement and on the receiving end of copyright infringement claims. This blog will briefly summarize a few of the notable copyright infringement cases Netflix has defended against in the United States. Then, the post will predict how Netflix may shift its content practices, defense strategies, and settlement tactics as a result of their past litigation successes in copyright actions.
The Conan Doyle estate, heirs to the author of the works about the famed detective Sherlock Holmes, alleged that Netflix infringed on the character Sherlock Holmes in its portrayal of Sherlock Holmes in the 2020 movie “Enola Holmes.” While most Sherlock Holmes stories are now in the public domain, the estate alleged that some works and character elements regarding Sherlock Holmes are still protected by copyright. The suit alleged that Sherlock Holmes’ character traits of warmth and empathy were copied and not yet in the public domain, as these traits only developed in later works that are still protected by copyright. Netflix filed a motion to dismiss, asserting that “warmth” is an unprotectable idea and explaining that the character Sherlock Holmes had exhibited warmth in works now in the public domain. Netflix and the estate quickly settled.
In another public domain case from 2015, Netflix was sued for copyright infringement, because the Plaintiff film distributor asserted that while the Italian film “The Bicycle Thief” was in the public domain, the subtitled version of “The Bicycle Thief” was not in the public domain. Before the court could decide if the subtitled version, a type of derivative work, could still be protected even if the underlying film on its own was available to be used by all, both parties settled.
In 2018, the Satanic Temple sued Netflix for fifty million dollars when Netflix used a sculpture of a goat-headed deity on “The Chilling Adventures of Sabrina.”  Both parties reached an amicable settlement. In 2019, Netflix was sued for appropriating footage for its documentary “Wild Wild Country” from a company that represents the controversial Indian cult leader the documentary was about and a filmmaker who had made a similar documentary. The case has also been settled. Netflix’s “Fyre Festival” documentary was accused of stealing footage, and this case was yet another case that quietly settled in 2019. In 2017, a photographer and copyright owner of images of VHS cassettes asserted that “Stranger Things” used these photos for its Collector’s Edition boxed set. Before lawyers got involved, pressure from the photographer resulted in the granting of a licensing fee. Another photographer sued Netflix in 2018, claiming his storm photos were used without permission in “Stranger Things,” which also resulted in a settlement.
Netflix has not settled all of these types of cases. For example, in a case that did not settle, Plaintiff, a Colombian journalist who wrote a memoir about her affair with Pablo Escobar and the beginnings of the Colombian drug trade, sued Netflix for copyright infringement in the hit show “Narcos.” Plaintiff argued that two scenes in the show were substantially similar to two chapters of her memoir, though she conceded that everything in her memoir was true. Netflix admitted it had access to and copied the memoir. The court ruled for Netflix by applying the principle that facts by themselves are not copyrightable and reasoning that Netflix solely copied the historically accurate events that actually occurred. In another case that did not settle, Netflix won a case when it used eight seconds of the song “Fish Sticks n’ Tater Tots” without permission in its documentary “Burlesque: Heart of the Glitter Tribe.” Netflix asserted a fair use defense at trial, and when applying the four fair use factors, the court found that the factors weighed in favor of Netflix.
When Netflix is sued for copyright infringement, settlement is the name of the game in the majority of circumstances. The derivative works and public domain cases suggest that Netflix may avoid court to escape bad precedents based on the extent of protection of derivative works, including what the public domain covers when there is a derivate work. For example, when “Bicycles Thieves” fell out of the public domain, the judge noted the possibility that the subtitled work could still be protected by copyright, but it was not determined under what circumstances since the parties settled. Settlement helps avoid this uncertainty and allows Netflix the latitude to try to limit derivative works protections until courts make official holdings on the particular issue at hand. While Netflix certainly has some truly original content, a lot of Netflix contents seems to be inspired by other works and stories; therefore, it is in Netflix’s interest to limit the protections of derivative works as much as possible.
If fault is clear or likely, Netflix’s preferred strategy seems to be to settle. For example, in the cases where footage and images were allegedly appropriated such as in “Wild Wild Country” and “Stranger Things,” Netflix settled. By comparing footage and images, it is straightforward to assess if the content was stolen and used without permission. Netflix likely recognized this and would rather settle for presumably less money than lose in court and risk their reputation. The “Chilling Adventures of Sabrina” case shows that Netflix tends to settle when large numbers are at stake and Netflix knows they were in the wrong, by blatantly copying.
When there is a clear defense, such as fair use or an assertion that only the facts were copyrighted, Netflix has no problem defending the action in court and will likely not settle. Of the cases that have been resolved in court, Netflix more likely than not prevails, probably because Netflix lawyers have numerous resources and the knowledge of adequate defenses at their disposal. For example, in the “Narcos” case Netflix likely understood that it is more difficult to prove copyright infringement when content involves real historical events and real people. Netflix’s “Narcos” win was likely because Netflix’s attorneys were fully aware that non-fiction works receive only thin copyright protection.
Netflix also seems to delay settlement when the show is one of Netflix’s more popular programs and liability is not clear. Perhaps this strategy is to engage in a fishing expedition to see if the assertions are warranted and to see what leverage Netflix has, if any; it seems decisions to delay settlement in the higher-profile cases involves Netflix’s worry of reputational harm and having to disgorge large amounts money the requisite show made for Netflix. The “Enola Holmes” case further taught Netflix that it may make sense to wait patiently when a work is about to enter the public domain instead of facing the headache of defending a copyright infringement case.
I predict that because of the success of shows like “Narcos” that are based on real, interesting people, Netflix will churn out more content based on historically accurate events and people. They will be able to defend copyright infringement in these cases if only the facts are copied. Netflix will just have to make sure characters, theme, plot, setting, mood, and pace are not substantially similar to avoid a possible copyright infringement case. Netflix would likely want to do that anyway and use their creative license to put a unique spin on a story and produce content viewers will want to see. Based on its fair use win in “Burlesque,” Netflix may try to incorporate more content using the fair use defense.
Netflix knows what it is doing. It may not try to seek a license with the expectation that the risk of settling is less costly than constantly paying expensive licensing fees. It seems Netflix sometimes engages in a “do not ask for permission, beg for forgiveness” policy when taking content. Netflix likely hopes the copyright holder does not know of said infringement or does not have enough resources to successfully bring the case to court. When Netflix does settle, the public does not know the specifics. These settlement cases virtually always include a confidentiality clause, which does nothing to tarnish Netflix’s reputation. However, even if there is blatant infringement, people will still watch Netflix, popcorn in hand.
 See Michael A. Mora, Netflix Will See More Copyright Litigation After Eleventh Circuit Ruling, Daily Business Review (Oct. 28, 2020), https://www.law.com/dailybusinessreview/202 0/10/28/netflix-will-see-more-copyright-litigation-after-eleventh-circuit-ruling/ (copyright litigator explains “the proliferation of online services will increase copyright claims”).
 Eriq Gardner, Netflix Settles‘Enola Holmes’ Lawsuit With Conan Doyle Estate, The Hollywood Reporter (Dec. 21, 2020), https://www.hollywoodreporter.com/thr-esq/netflix-settles-enola-holmes-lawsuit-with-conan-doyle-estate.
 Gardner, supra note 2.
 See 17 U.S.C. §101 (2010) (“A ‘derivative work’ is a work based upon one or more preexisting works, such as a translation … or any other form in which a work may be recast, transformed, or adapted.”); Eriq Gardner, Netflix Hit With Copyright Lawsuit Over Classic Italian Film ‘Bicycle Thief’, The Hollywood Reporter (Oct. 22, 2015), https://hollywoodreporter.com/thr-esq/netflix-hit-copyright-lawsuit-classic-833908.
 Gardner, supra note 7.
 Nate Nickolai, Satanic Temple Settles ‘Chilling Adventures of Sabrina’ Lawsuit Against Netflix, Variety (Nov. 21, 2018), https://variety.com/2018/tv/news/satanic-temple-chilling-adventures-of-sabrina-lawsuit-netflix-1203034905/.
 Chris Perez, Netflix Sued for Copyright Infringement over ‘Wild Wild Country’ Documentary, New York Post(Jan. 31, 2019), https://nypost.com/2019/01/31/netflix-sued-for-copyright-infringement-over-wild-wild-country-documentary/.
 Blake Brittain,‘Wild Wild Country’ Group Resolves Netflix Copyright Claims (1), Bloomberg Law (Feb. 6, 2020), https://news.bloomberglaw.com/ip-law/wild-wild-country-group-dismisses-netflix-copyright-claims.
 Ashley King, Netflix Quietly Settles Its Fyre Festival Copyright Infringement Lawsuit, Digital Music News (July 18, 2019), https://www.digitalmusicnews.com/2019/07/18/netflix-fyre-festival-copyright-lawsuit/.
 Gough Li, Netflix Stole My VHS Cassette Photos for Its Stranger Things Boxed Set, PetaPixel (Nov. 27, 2017), https://petapixel.com/2017/11/27/netflix-stole-vhs-cassette-photos-stranger-things-boxed-set/.
 See Vallejo v. Narcos Prods., No. 19-14894, 2020 U.S.App. LEXIS 33809, at *2. (11th Cir. 2020).
 Id. at *13.
 Id. at *18-20.
 17 U.S.C. §107 (1992) (the four fair use factors are “1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”); Brown v. Netflix, 462 F. Sup. 3d 453, 453-54 (S.D.N.Y. 2020).
 Brown, supra note 21, at 460-64.
 See supra notes 2, 9, 12-14 and accompanying text.
 Gardner, supra note 7.
 See supra notes 12-14 and accompanying text.
 See generally Vallejo, supra note 17; Brown, supra note 21.
 Vallejo, supra note 17, at *15 n.2.
 E.g., Danial Goldblatt, Netflix, ‘Stranger Things’ Creators Sued for Copyright Infringement, The Wrap (July 16, 2020), https://www.thewrap.com/netflix-stranger-things-copyright-infringement-lawsuit/ (Netflix representatives refused to settle when the Plaintiff claimed the idea for “Stranger Things” was stolen from him).
 Vallejo, supra note 17, at *13 (distinguishing between unprotected facts and the protected expression of those facts).
 Brown, supra note 21, at 464.